During the past week, the price of Ethereum has increased by 45%, Bitcoin – by almost 20%. Let’s try to answer one of the main questions of traders and investors — what to do with assets now, will they continue to rise in price or will the correction begin?
On the night of Tuesday, January 5, the price of Bitcoin on the Binance crypto exchange exceeded $32.8 K, now it is $31.2 K. Over the past day, the cryptocurrency has risen in price by 6%, during a week – by almost 20%. On January 3, the price of the Bitcoin updated the historical maximum of $34.7 K.
At the same time, on the morning of January 4th, the exchange rate of the largest altcoin by capitalization, Ethereum, has reached $1.1 K for the first time since February 2018. A breakdown of the psychological resistance level of $1 K can open the way for the cryptocurrency to its historical maximum of $1.4 K, experts say. However, a decline in the price to $1 K and below in the near future may provoke a further fall to $838.
Regarding Bitcoin, it is worth to note that we should not expect a strong correction,
FXOpen experts say. First, large crypto investors do not sell their coins, but on the contrary, withdraw liquidity from exchanges, which has a positive effect on the price. Secondly, despite the rather strong information noise around Bitcoin, the number of daily new BTC addresses has still not reached the level of 2017. It means that Bitcoin’s growth is largely organic, not viral. Third, the boom in open purchases of Bitcoin by institutional investors has pushed the rate up quite strongly, but in addition to large funds, the creation of reserves in Bitcoin by government agencies has begun.
For example, the mayor of Miami said that he could invest part of the city’s treasury reserves in Bitcoin, because «Bitcoin was the most stable investment during an incredibly unstable year.»
It is also worth to note that there is not yet enough pressure from Bitcoin sellers to start a correction of the price. Even when it fell to $27.7 K, from $28 K and up to $30 K Bitcoin was actively bought out, supporting its price.
Only if the price breaks down again to $30 K level, BTC will go to a deeper correction, perhaps even to $24 K, experts say. However, even in this case, it will be a great opportunity to buy Bitcoin for $24 K. There is no reason to sell Bitcoin now. The same is for Ethereum. In the event of a drop the price below $975, the road will open to a deeper correction in the area of $750. But, as in the case of BTC — it will be a great opportunity to buy ETH cheap.
In order for Ethereum to update its historical maximum in the coming days, it needs to rise above the local peak of $1.1 K. This situation is real, because of the growth dynamics in recent days. I expected to see the current price no earlier than in March, perhaps even in April.
Earlier, strategists from JPMorgan have predicted that in the long term, the price of Bitcoin could exceed $146 K. They warned that it is impossible to exclude the possibility of speculative mania, which in the near future may push the price of the first cryptocurrency to $50-100 K. However, such price levels will be unstable.